Our consumer champion tackles your complaints
My mother was widowed in November 2015. My stepfather left everything to her and she was executor of his will. “Everything” includes their home, worth about £800,000, but with a mortgage of about £400,000. The house and the mortgage were solely in my stepdad’s name. The mortgage is part interest-only and part repayment.
A few months before he died my stepdad took out a two-year fixed-rate mortgage deal, which has come to an end, and interest is going to be charged at the Halifax standard variable rate. This means my mother’s repayments will more than double, which she cannot afford. We spoke to a mortgage adviser, who had not come across this scenario, but thought that if we could get Halifax to add my mum’s name to the account, he might be able to speak to them on her behalf.
Halifax said it wasn’t that simple. We were asked if she had power of attorney (PoA) for my stepdad. We argued that surely the fact that she’s the sole beneficiary and the executor are as good as having PoA, but Halifax didn’t agree. It acknowledges that the will leaves everything to Mum and suggests that we see a solicitor to change the deeds to her name. She could then apply for a mortgage in her own right. Who is going to lend a 74-year-old pensioner £400,000?
We’re stuck and can’t believe that common sense doesn’t have a role to play. Halifax was very good with my mother after my stepdad’s death, offering reassurance that it wasn’t going to force her to sell. She was initially advised to stop making repayments, but a financial adviser warned her about the long-term impact of this and so we made up the shortfall and continued to repay. Surely if at one time Halifax was happy to receive no payment, it should be more open to discussing affordable options for repayments with my mother?
Tina Flower, via email
Tina goes on to explain that her stepdad ran a bed and breakfast, which although not profit-making enabled the couple to continue living in their beautiful cottage. Her mother has carried on running it, but would like to sell. The house was on the market for about six months, but had only three viewings. It went back on the market with a price drop in May, with no success. “With the housing market being what it is, my mother will not be able to sell unless she reduces the price significantly,” Tina says. “As the proceeds from the sale are the only pension provision that she has, we are keen to protect her from this. All we’re looking for from Halifax is to allow my mother access to a more affordable deal while she continues to live in her home.”
Despite pleas to Halifax, it is not happy to negotiate a deal, so it looks as if Tina’s mum might have little choice.
A spokeswoman for the bank says: “We are very sorry that Mrs Lees finds herself in this unfortunate situation. Since being informed of Mr Lees’ passing in 2015, we have spoken with Mrs Lees on numerous occasions during the probate process and discussed options for her property and the associated mortgage.
“While we always consider all options to help find an appropriate solution for our customers, it is not possible to transfer the mortgage into her name or to a new fixed rate because of Mrs Lees’ individual circumstances.”
Sadly, this is not an unusual situation, according to Dennis Hall, the chief executive of Yellowtail financial planning. “I have come across too many cases where, more often than not, husbands believe they are doing their spouses a favour by dealing with money, but end up leaving them unprepared, and in cases like this, vulnerable,” he says.
“I cannot stress enough that dealing with these situations post-death isn’t the answer. These are conversations that they should have had before their partners died.”
He also highlights the benefits of protection. A life insurance policy would have given Tina’s mother the chance to wipe out or reduce the outstanding debt with a payout.
Mortgage debts remain due at death and are payable by the executor out of the estate.
David Hollingworth of London & Country, a mortgage broker, says: “To change the names on the mortgage, a lender will typically expect to be able to see that the lending will be affordable. That will mean assessing income and outgoings. In addition, tighter criteria around maximum age at the end of the mortgage term means that many cap the age to 75.”
Tina’s mother could consider asking her daughter to be a guarantor on a mortgage, or there is the option of equity release, “useful for those that cannot afford a mortgage payment, but need to tap into their equity, as long as they are happy for interest to roll up”, Mr Hollingworth says.
If Tina’s mother goes down this path she should seek advice. The amount available through equity release would be limited to a proportion of the property value, depending on age, and in her case the mortgage is still a large percentage of the value of the cottage.
Not so ‘free’ tablet
In October 2016 Vodafone phoned offering a free tablet, which I accepted. After doing some research, however, I realised that the tablet would not be “free”, so I phoned and cancelled the order. The tablet was never sent. Two months later I noticed that Vodafone was charging me £10 rental. I phoned the company and it was happy to refund me the £20 I had paid. In June this year I stopped using Vodafone after my mobile phone contract ended. Since then I keep receiving text messages claiming I owe £28.93 for my “still active” contract for my tablet.
Vodafone is now claiming I signed for the tablet. I also realise that I have been charged monthly rental since last year. My mistake was not double-checking my bills. I am also worried about my credit score.
Lioka Raptopoulos, London
There’s no such thing as a free tablet from a mobile phone provider, whatever the persuasive salesperson tells you. They are “free” provided you sign up for a monthly rental contract with data. If you agree to have one sent to you, you are committing to pay, or you will face early termination charges. Lioka was told she would have to pay £131.44 to cancel the contract. A letter from Vodafone goes on to state that if she doesn’t keep paying, her account would be placed into a collection process.
Vodafone told me that it offers tablets with no upfront charges — hence why it was promoted as being free — but as part of a monthly rental agreement. A spokeswoman says: “It is regrettable that we did not properly carry out the customer’s request to cancel the agreement on time. We have since apologised and confirmed that all charges have been refunded and the account has been closed. We have also reassured her that there is no impact on her credit file.”